Following a year full of obstacles to overcome, the U.S. and Korea finally fulfilled contracting requirements for the U.S. Country Specific quota (CSQ) agreement. The CSQ agreement called for 132,304 MT milled basis, of annual U.S. rice purchases as part of Korea's World Trade Organization commitments.
The tenders were scheduled at regular intervals throughout the year to help stagger shipping periods to Korea, although prior to the CSQ being signed, the tenders were all typically concentrated at the end of the year. This improved certainty of tonnage, and spacing allows for more predictability and improved logistical flow to U.S. customers in Korea.
The total value of the 2020 CSQ sales exceeded $130 million, surpassing the $110 million the U.S. government initially estimated as the agreement's annual return.
In 2014, the United States, Australia, China, Thailand, and Vietnam entered into negotiations with Korea when its special treatment for rice market access under the World Trade Organization (WTO) expired. As a result of these negotiations, Korea agreed to include in its WTO Schedule a 408,700-ton tariff-rate quota for rice imports with a 5% in-quota duty and a 513% above-quota duty. Of that 408,700 tons, Korea will allocate 388,700 tons of rice into country-specific quotas under a Plurilateral Agreement with the United States, Australia, China,
Thailand, and Vietnam. The remaining 20,000 tons will be administered on a global basis, which U.S. suppliers can also bid for.
“Thanks to President Trump’s leadership, this agreement gives our farmers the largest volume of guaranteed market access for rice in Korea that the United States has ever enjoyed,” said Ambassador Robert Lighthizer. “It will prove enormously beneficial for American producers and their customers in Korea, who will enjoy access to high quality and cost competitive U.S. rice.”
Secretary Perdue said, “Today’s announcement is another great testament of President Trump’s determination to expand export opportunities for America’s farmers and ranchers. Exports are critical for the economic health of the U.S. rice industry, with half our crop being exported every year. Agreements like this, that expand opportunities for U.S. rice producers in important markets, are critical to introduce foreign customers to the bounty of goods produced
by America’s farmers.”
"We are glad to get the first year of the new CSQ agreement behind us," said Michael Rue, California rice farmer and chair of the USA Rice Asia Trade Policy Subcommittee. "While everything may not have gone exactly as we might have imagined considering the challenges caused by the pandemic, we are pleased that our counterparts in Korea were fair and reasonable and, all-in-all, delivered on the terms of the agreement."
Between both market value and tonnage, Korea is consistently a top ten market for U.S. rice exports.
"We look forward to maintaining an open dialogue with Korea to keep the momentum going," said Rue. "We were glad to be able to hold virtual discussions earlier this fall but look forward to meeting face-to-face sometime in 2021."
The agreement will enter into force on January 1, 2020.
Christmas come early for rice farmers
